Equity Trustees confirms full-year result and final dividend

26/08/2010

 Equity Trustees Limited today confirmed its full year financial results, which are in line with the company’s unaudited results announced on 3rd August, 2010. Net profit after tax is unchanged from the prior year, summarised as follows:   

Equity Trustees’ Chairman, Mr Tony Killen, said the results were pleasing given the continuation of market volatility and challenging business conditions during the financial year. “This result reinforces the Board’s view that the Group is performing strongly and is well positioned to take advantage of an improving business environment.”

“We are also pleased to advise that the fully franked final dividend will be maintained at the same level as in the previous two years at 60¢ per share, taking the full year payout to 110¢ per share. The company enjoys a robust balance sheet with no debt and has generated improved operating revenue in 2010.  We believe that continued healthy operating margins and cashflows should encourage shareholders to share the Board’s confidence in the strength and direction of the Group.”

“The Board’s longer term policy in respect of dividends remains unchanged. It is our intention in normal circumstances to pay dividends representing 70-90% of after-tax profit (including profit on the sale of investments). The decision to adopt a temporary payout ratio above this range is to recognise the exigencies of recent periods and the large amount of franking credits available for distribution. It does not imply that the policy range will be exceeded on average throughout the business cycle.”

The Managing Director, Mr Robin Burns, commented that, “Our key performance metrics illustrate the slowly improving operating conditions that we experienced during the year. Operating revenue was up 2.1% to $34.5m while net-profit-after-tax was unchanged from last year at $8.0m. Earnings per share declined marginally by 1.9% to 96.60¢.”

“At the half year it was hoped that an improvement in investment markets would help to produce a solid second half. Notwithstanding continuing market volatility, it is pleasing to see the second half operating profit exceed the first half by approximately 20%.”

“All of our business units performed well in light of the specific factors each faced in its sector and we are particularly pleased to note the continuing growth in the private client business. This augurs well for the company over the long-term given the level of demand forecast for high net worth wealth management in the future and the likely changes in the industry over coming years.”

“The diversity of our business lines again proved to be a positive for the company. Despite some small declines in revenue in some areas we saw good growth in funds under management in most products, although the changing mix in investors’ exposures resulted in a trend to lower margin products. We believe this will prove to be a cyclical issue.”

Mr Burns also said that, “Expenses were again tightly controlled and we continued to invest in projects that will lead to improved efficiency and service delivery in future periods. Our focus now, having traversed in good shape the most challenging business conditions many of us have experienced, will be on returning to our long term growth aspirations and business development plans.”

“Equity Trustees has demonstrated resilience in profits and performance during the last two difficult years, following a number of years of strong growth. We believe that the company can continue to operate successfully, and plan for the future, despite continuing difficult market conditions. Should a sustained recovery emerge we are confident that the company stands in an excellent position to benefit from it and quickly return to a high growth path.”

“Our overall strategic plan remains fresh and balanced for the conditions and we will continue to pursue it in the long-term interests of all our stakeholders. The Board, management and staff will continue to focus on delivering returns to shareholders, developing the company for the future and growing the business in a sustainable and measured way.”